For months, the money for Egypt — more than $1.5 billion, with the
bulk earmarked for the military — has been withheld amid that
country’s crackdown on pro-democracy groups, including several U.S.-
based organizations with close ties to political parties in
Washington.

A law passed by Congress in December forbids funding unless the State
Department certifies that Egypt is making progress on basic freedoms
and human rights.

But Secretary of State Hillary Rodham Clinton is close to announcing
plans to bypass those restrictions on national security grounds,
according to senior administration officials and others who have been
briefed on the deliberations but were not authorized to speak
publicly. The administration believes failure to provide the funds
would risk worsening already fraying ties with Egypt’s leaders, most
notably the Egyptian military, which still controls the country.

Under the plan, which could be announced as early as next week and
was first reported Friday by the New York Times, Egypt would not
receive the full $1.5 billion all at once, as has been the practice
for decades. The administration would instead dole out the funds in
smaller portions to preserve leverage over Egyptian authorities,
officials said. The plan would also allow for the continuation of
U.S. defense contracts that provide American jobs.

With a presidential election coming in Egypt, officials said they are
especially hesitant to release the full amount until they see what
kind of government will be receiving it.

The plan comes after weeks of crisis caused by criminal charges filed
by Egyptian authorities against a handful of pro-democracy workers
from the United States and other countries. The charges were
condemned by U.S. leaders and provoked heated anti-American rhetoric
in Egypt.

The immediate dilemma was resolved this month when Egypt allowed the
foreign workers to leave the country after posting bail. But the
criminal charges remain against them as well as Egyptian staff
employed by the same nonprofit organizations.

According to administration and congressional officials,
representatives of the defense industry, who are eager to keep
lucrative contracts attached to the annual aid, have been among those
lobbying behind the scenes to resume U.S. funding. The Pentagon,
which does not want to risk its ties with the Egyptian military, one
of its major allies in the region, also has pressed the case.

“There’s been enormous pressure from the Pentagon to unfreeze
something before payments to contractors go past due,” said Tom
Malinowski, Washington director for Human Rights Watch. “But this
whole argument that American jobs are at stake just is not
appropriate here when we’re talking about human rights. This sends
the wrong message that the crisis is over and has been solved.”

“That’s not a negligible factor. If contracts can’t be paid,
production lines will shut down and jobs will be lost,” acknowledged
one senior administration official. “But those aspects have to be
balanced against other factors such as our ability to work with the
new government, how much democratic progress has been made and where
we still have concerns.”

The plan is likely to draw strong criticism from Capitol Hill, which
has been highly critical of Egypt’s treatment of nongovernmental
organizations and protesters.

Sen. Patrick J. Leahy (D-Vt.), the main sponsor of legislation passed
last year that tied funding for Egypt to progress on democracy and
rights, said he was deeply disappointed.

“I believe a waiver would be a mistake,” he said. “The new conditions
are intended to put the United States squarely on the side of the
Egyptian people who seek a civilian government that respects
fundamental freedoms and the rule of law, and to clearly define the
terms of our future relations with the Egyptian military.”

Other rights groups, including Amnesty International, also urged
Clinton not to resume the aid.

State Department spokeswoman Victoria Nuland said Clinton has not yet
reached an official decision but added: “We want to support a more
democratic and a more prosperous Egypt. And we want to see the region
stay secure. So those are a lot of things that have to be kept strong
and kept in balance.”

The relationship between the United States and Egyptian militaries,
Nuland said, “has also enabled us to have influence during this
period of transition.”

While Egypt’s generals have lobbied to resume the aid, the country’s
new parliament in recent days has discussed the possibility of
rejecting it, even though it does not have the authority to do so.